Tax Question

[Robert Miller]

I`m buying an REO with transactional funds and doing a double closing to flip it immediately.I`m buying for $43k total,reselling for $82k.Now the transactional funds are paid back pretty much at the end of the double closing.My question is am I taxed on the $39k I`m making on the deal,or am I taxed for the entire sales price of $82k? If the latter,how the hell do wholesalers make money on deals? It`s over $27k in taxes on the $82k so that would kill almost all my profit.Thanks in Advance

[J Scott]

You will ultimately owe tax on the net income you receive on the property, in this case, around $39K.

Additionally, you may be entitled to take other deductions, including any costs associated with the transactional funds, etc.